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An integrated ant colony optimization approach to compare strategies of clearing market in electricity markets: Agent-based simulation

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  • Azadeh, A.
  • Skandari, M.R.
  • Maleki-Shoja, B.

Abstract

In this paper, an innovative model of agent based simulation, based on Ant Colony Optimization (ACO) algorithm is proposed in order to compare three available strategies of clearing wholesale electricity markets, i.e. uniform, pay-as-bid, and generalized Vickrey rules. The supply side actors of the power market are modeled as adaptive agents who learn how to bid strategically to optimize their profit through indirect interaction with other actors of the market. The proposed model is proper for bidding functions with high number of dimensions and enables modelers to avoid curse of dimensionality as dimension grows. Test systems are then used to study the behavior of each pricing rule under different degrees of competition and heterogeneity. Finally, the pricing rules are comprehensively compared using different economic criteria such as average cleared price, efficiency of allocation, and price volatility. Also, principle component analysis (PCA) is used to rank and select the best price rule. To the knowledge of the authors, this is the first study that uses ACO for assessing strategies of wholesale electricity market.

Suggested Citation

  • Azadeh, A. & Skandari, M.R. & Maleki-Shoja, B., 2010. "An integrated ant colony optimization approach to compare strategies of clearing market in electricity markets: Agent-based simulation," Energy Policy, Elsevier, vol. 38(10), pages 6307-6319, October.
  • Handle: RePEc:eee:enepol:v:38:y:2010:i:10:p:6307-6319
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    References listed on IDEAS

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    1. Junjie Sun & Leigh Tesfatsion, 2007. "Dynamic Testing of Wholesale Power Market Designs: An Open-Source Agent-Based Framework," Computational Economics, Springer;Society for Computational Economics, vol. 30(3), pages 291-327, October.
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    Citations

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    Cited by:

    1. Li, Gong & Shi, Jing & Qu, Xiuli, 2011. "Modeling methods for GenCo bidding strategy optimization in the liberalized electricity spot market–A state-of-the-art review," Energy, Elsevier, vol. 36(8), pages 4686-4700.
    2. Shivaie, Mojtaba & Ameli, Mohammad T., 2015. "An environmental/techno-economic approach for bidding strategy in security-constrained electricity markets by a bi-level harmony search algorithm," Renewable Energy, Elsevier, vol. 83(C), pages 881-896.
    3. Sarıca, Kemal & Kumbaroğlu, Gürkan & Or, Ilhan, 2012. "Modeling and analysis of a decentralized electricity market: An integrated simulation/optimization approach," Energy, Elsevier, vol. 44(1), pages 830-852.
    4. Aliabadi, Danial Esmaeili & Kaya, Murat & Şahin, Güvenç, 2017. "An agent-based simulation of power generation company behavior in electricity markets under different market-clearing mechanisms," Energy Policy, Elsevier, vol. 100(C), pages 191-205.
    5. Huiru Zhao & Yuwei Wang & Sen Guo & Mingrui Zhao & Chao Zhang, 2016. "Application of a Gradient Descent Continuous Actor-Critic Algorithm for Double-Side Day-Ahead Electricity Market Modeling," Energies, MDPI, Open Access Journal, vol. 9(9), pages 1-20, September.
    6. Bazmi, Aqeel Ahmed & Zahedi, Gholamreza, 2011. "Sustainable energy systems: Role of optimization modeling techniques in power generation and supply—A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(8), pages 3480-3500.

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